In my last post, I shared my observations and research evidence into why leaders should prioritize culture. In short, a culture that fosters and leverages collective intelligence (CI) creates improved outcomes for the firm and contributes to an inclusive environment for a cognitively diverse team.
Awareness of the benefits, while essential, is only the first step, however. Action and commitment must follow. Accordingly, the focus here shifts from the why to the how.
A firm’s culture reflects how its team members work and interact and the behaviors that the firm holistically values or tolerates. Whether intentionally cultivated or not, firm values are revealed in its culture. Best practice, therefore, is to be explicit about desired behaviors.
Leaders must define the culture the firm aspires to build. No universal “ideal” culture exists. Firms are unique and diverse, and their cultures should match their mission, strategy, and leadership values. Defining a culture from scratch can be daunting.
A values-based framework can help identify and clarify the firm’s ideal culture. Leaders specify the values the firm prizes most as well as the “anti-values” that should be avoided. Paradoxically, by describing our anti-values — the behaviors we don’t want — we often gain insight into those we seek.
A specific value or set of values does not necessarily define a culture. Even if firms share the same priority — say, unlocking the benefits of cognitive diversity — many different values can express and contribute to this outcome. The key is to select a set of values that individually and collectively represents the preferred culture.
At Research Affiliates, we have created and sustained a culture that promotes trust and respect, one where independent — and often dissenting — views can flourish. Our core values are curiosity, authenticity, collaboration, and responsibility. Our anti-values are blaming, committing to be right, withholding, and lack of trust. Our environment promotes both higher CI and better outcomes.
Of course, listing values and anti-values alone does not establish our ideal culture. To avoid ambiguity and create alignment, we describe the desired behaviors that foster each value or minimize its anti-value. We express these in concrete terms. Tangible behaviors that demonstrate curiosity, for example, include emphasizing learning, challenging conventional thinking, being open to independent views, and discouraging groupthink among the team.
We take this a step further by distilling the desired behaviors associated with each value into short and actionable statements:
- Responsibility: We own our actions and solve problems.
- Curiosity: We emphasize learning, seek feedback, and welcome independent views.
- Authenticity: We reveal our intentions, speak candidly, and honor our word.
- Collaboration: We create shared success by partnering with colleagues and clients.
Many behaviors can impede the creation of high-performing teams. These are typically unintentional and may arise from inherent cognitive biases. For instance, a team member with confirmation bias is committed to being right. Highlighting unwanted behaviors in a transparent and deliberate format can help them shift back to the desired behavior.
At Research Affiliates, we associate the following counterproductive behaviors with our anti-values:
- Blaming prevents accountability and initiative taking.
- Committing to be right dismisses dissenting opinions.
- Withholding puts personal agendas above team objectives.
- Lacking trust leads to a competitive, compete-to-win culture.
Finally, the core set of values should contribute collectively and holistically to the firm’s vision of an ideal culture. Do the values interact to create the desired culture? Do the cultural norms inspire behaviors that support the culture to which the firm aspires?
In summary, the values-based framework can help leaders define, clarify, and establish a firm’s desired culture. But ensuring that culture endures requires sustained monitoring and deliberate commitment. We can’t simply set-it-and-forget-it.
So how can leaders nurture the desired culture over time? That will be the subject of my next piece.
If you liked this post, don’t forget to subscribe to the Enterprising Investor.
All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
Image credit: ©Getty Images/Elena Peremet
Continuing Education for CFA Institute Members